Evolutionary stability of discrimination under observability

22 Pages Posted: 29 Jan 2008 Last revised: 25 Sep 2008

Date Written: September 23, 2008

Abstract

We study the evolution of preferences under perfect and almost perfect observability in symmetric 2-player games. We demonstrate that if nature can choose from a sufficiently general preference space, i.e. preferences over outcomes that may depend on the opponent's preference-type, then, in most games, only discriminating preferences (treating different types of opponents differently in the same situation) can be evolutionary stable and some discriminating types are stable in a very strong sense in all games. We use these discriminating types to show that any symmetric outcome which gives players more than their minmax value in material payoffs (fitness) can be seen as equilibrium play of a player population with such strongly stable preferences.

Keywords: evolution of preferences, stability, observability, discrimination

JEL Classification: C72, C73

Suggested Citation

Herold, Florian and Kuzmics, Christoph, Evolutionary stability of discrimination under observability (September 23, 2008). Available at SSRN: https://ssrn.com/abstract=1088151 or http://dx.doi.org/10.2139/ssrn.1088151

Florian Herold (Contact Author)

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Christoph Kuzmics

University of Graz - Department of Economics ( email )

Universitaetsstrasse 15
RESOWI - F4
Graz, 8010
Austria

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